Result Analysis : Astec Life – Q2FY21

Result Analysis : Astec Life – Q2FY21

Total revenue from operations 155 Cr 

140.2 Cr (10.71%) YoY | 111.9 Cr (38.52%) QoQ 

Half yearly revenue: 266.9 Cr Vs. 217.2 Cr (22.54%)

Net Profit of 17.8 Cr 

5.3 Cr (235.82%) YoY 16.1 Cr (10.61%) QoQ 

Half yearly Net profit: 34.04 Cr Vs. 4.1 Cr (750.21%)

EPS (in Rs.) 9.11

2.70 YoY | 8.26 QoQ 

Half year ending EPS: 17.3 Vs. 2.13

View: Result is overall good. Although revenue marginally increased in YoY but profit up by more than 200%.

Business Updates & Highlights

Q2FY21 EBITDA was around INR 29.3 Cr Vs. 15.2 Cr in Q2FY20 Vs. 28.2 Crs in Q1FY21 therefore up by 92.8% in YoY and up by 3.9% in QoQ. EBITDA margin is around 18.9% Vs. 10.9% in YoY Vs. 25.2% in QoQ. Therefore EBITDA margin improved by 800 bps in YoY and declined by 630 bps in QoQ.

H1FY21 EBITDA was around INR 57.6 Crs Vs. 21.6 Crs in H1FY20 therefore up by 166% in YoY. EBITDA margin in H1FY21 was around 21.5% Vs. 9.1% in H1FY20. 

Financial

ROE and ROCE is around INR 22% and 21% respectively and book value per share is around INR 126 and share is currently trading at 9x of its book value. Company is currently trading at annualized PE (forward PE) of 32 which is good as per Industry benchmark. Promoter holding is around 70% in the company which very strong but decreased by more than 2% in QoQ. FIIs and Mutual fund hold around 0.6% and 0.3% in the company. Company is very strong operating cash flow as of Sep 2020 it was around INR 18.9 Cr Vs. (1.1) Cr in Sep 2019 Vs. 16.9 Cr in March 2020. (Very Strong). The good thing is company is continuously reducing their debt and interest cost significantly down in this quarter in Q2FY21 it was around 1.13 Cr Vs. 3.58 Cr in Q2FY20 Vs. 1.54 Cr in Q1FY21. 

Share View: Share price high 1,365 (52 week) and now 1,090. Astec LifeSciences Limited is an India-based company and part of Godrej Group. The Company is engaged in agro chemicals, including fungicides and herbicides business. It manufactures a range of agrochemical active ingredients and pharmaceutical intermediates.

Position: Share support price is INR 1000. Share can delivered good return in short to mid term. 

Opportunities : Astec has an extensive track record spanning more than two decades and it enjoys an established position in the manufacturing of technical grade fungicides. Supported by its technical competency, the company has established itself as one of the preferred suppliers of technical grade fungicides to a reputed clientele, comprising large MNCs, in the domestic and export markets. Furthermore, the company’s investments in the new R&D lab are expected to provide a significant boost to R&D capabilities, enabling it to develop new products and also benefit from the opportunities that the global demand shift from China may present for the Indian entities. Continuously reducing their debt on YoY and QoQ. Double digit growth in both topline and bottom line for past 5 years. Last 5 year CAGR growth is around 35%. Strong parentage and financial flexibility as a part of Godrej Group. Astec has benefitted in terms of managerial as well as financial support from GAVL. Astec continues to benefit from the strong financial flexibility arising on being a part of the Godrej Group.

Risk: Company’s revenues remain susceptible to the vagaries of monsoons and the regulatory risks associated with the ban of products by regulatory authorities upon review or change in regulations. Moreover, its profit margins remain exposed to the fluctuations in raw material prices, primarily those sourced from China. QoQ margin was declined in this quarter. Astec derives a large part of its revenues from a few products within the Triazole fungicide category. 

Sources: Various publications

 Disclaimer: The information provided herein is based on publicly available information and other sources believed to be reliable, but involve uncertainties that could cause actual events to differ materially from those expressed or implied in such statements. The document is given for general and information purpose and is neither an investment advice nor an offer to sell nor a solicitation. While due care has been exercised while preparing this document, we do not warrant the completeness or accuracy of the information. We will not accept any liability arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice.

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